Calculating the Return for a Master’s Degree

April 10, 2013

Those who are prospective students need to start considering the statistics and the numbers before they enroll in their next graduate program. Because of the hypercompetitive nature of the workforce, it's very important for students to be able to stand out as prospective employees – many employees would consider attending graduate school to be one way that they would be able to accomplish this. However, having a master's degree isn't always the most credible financial choice. Students that are considering getting an advanced degree in any type of discipline need to think of two key points – how much the degree is going to cost and what salary they are going to be able to earn when they have graduated.

Most master's programs now post the information regarding the average starting salary for recent graduates on their websites. Some schools are able to offer grants, scholarships, and fellowships to help out with reducing the cost that is associated with the degree itself. Students also have the option of using grad school calculators, which help them to figure out the numbers and costs associated with their decision, as well as the amount of 'return' they might get on the investment they made into their future. Although the top business schools are able to provide information about some of the starting salaries that are available for recent graduates, it's important to realize that these are only averages and that they're not always a clear reflection of how much a graduate may really earn after they have finished attending school.

Pursuing employment pathways like finance or economics can help by paying dividends and may help graduates to stand out when compared to others. This is because it provides technical and professional training, which is unique because there are very few undergraduates which are able to have the technical skills that are necessary to figure out elements like make financial forecasts or setting appropriate prices. People who want to be high school teachers or grade school teachers may find that getting a master's degree in education may not be the best choice – if they attain a master's degree they earn another $5,000 a year, but around 50 percent of new educators will quit teaching within the first five years that they've started. That information was provided by the National Commission on Teaching and America's Future.

Individuals who are just starting and don't have the experience to be a teacher yet or don't even know if they want to remain a teacher are advised not to instantly pursue getting a master's degree. In fact, students in this situation are advised to teach in some capacity for at least a year before moving into a graduate program. This will allow them to pursue a graduate degree fitting their likes rather than simply finding a graduate program to fit immediate needs. Additionally, the boost that is associated with having a master's degree in terms of salary is not always promised to be there – there are many states that don't offer this option and even more states that are becoming interested in providing incentive pay and raise starting salaries instead.